New business premium income for life insurance companies fell 23% during the April-August 2011 compared with the same period last year mainly due to the base effect

The fall in collection is on account of the base effect after insurers last year tried to meet annual targets ahead of change in norms since the new guidelines came into effect from September 2010. Pension, which contributed to almost 36% of the income, has come down to 17%.

Also, products such as universal life policies were redesigned as variable insurance policies. From September, the insurance regulator had imposed norms such as cap on various charges like premium allocation, policy administration and fund management on unit-linked insurance products.

Also, it mandated a 4.5% return on pension plans. This has affected the sales of the insurance products in the sector.

Surprisingly, group insurance has done better during the period and has gone up 23% while individual business dropped 45% during the period.

According to Irda data, the industry collected a premium of 40,653 crore by selling new policies.